Harvey v. Yanko,


2008 BCSC 1535

Date: 20081112
Docket: M92244
Registry: New Westminster


Jennifer Harvey



Matthew Yanko, Ann Marie Yanko, and the
Insurance Corporation of British Columbia


Before: The Honourable Madam Justice Gropper

Reasons for Judgment

Deduction of Part 7 Benefits

Counsel for Plaintiff

G.A. Smith

Counsel for Defendants

G.P. Brown

Date and Place of Trial/Hearing:

June 24, 2008


Vancouver, B.C.


[1]                In my Reasons for Judgment in this matter, Harvey v. Yanko, 2007 BCSC 216, I assessed special damages as $15,283.16.  Of that, $10,000 represented the plaintiff’s claim for future medical expenses, primarily medication.


[2]                The issue is whether the $10,000 awarded for future special damages should be deducted from the judgment in accordance with s. 25 of the Insurance (Motor Vehicle) Act, R.S.B.C. 1996, c. 231 (the “Act”).

Statutory Provisions

[3]                The Insurance (Motor Vehicle) Act was in effect at the time the cause of action arose, the pleadings were filed, and the reasons for judgment were issued.  Section 25 of the Act was repealed by the Insurance (Motor Vehicle) Act, R.S.B.C. 2003, c. 94, 20.  The Act has now been amended by the Insurance (Vehicle) Act, R.S.B.C. 1996, c. 231. 

[4]                This decision is made under the provisions of the Insurance (Motor Vehicle) Act.

[5]                Section 25 of the Act provides:

25 (1)   In this section and in section 26, "benefits" means a payment that is or may be made in respect of bodily injury or death under a plan established under this Act… and includes accident insurance benefits … that are provided under a contract or plan of automobile insurance wherever issued or in effect.

(2)        A person who has a claim for damages and who receives or is entitled to receive benefits respecting the claim, is deemed to have released the claim to the extent of the benefits.

(4)        In an action in respect of bodily injury … caused by a motor vehicle … its use or operation, the amount of benefits paid, or to which the claimant is or would have been entitled, must not be referred to or disclosed to the court or jury until the court has assessed the award of damages.

(5)        After assessing the award of damages under subsection (4), the amount of benefits referred to in that subsection must be disclosed to the court, and taken into account, or, if the amount of benefits has not been ascertained, the court must estimate it and take the estimate into account, and the person is entitled to enter judgment for the balance only.

[6]                Section 88(1) of the Insurance (Motor Vehicle) Act Revised Regulation (1984), B.C. Reg. 447/83, requires the Insurance Corporation of British Columbia (the “Corporation”) to, “pay as benefits all reasonable expenses incurred by the insured as a result of the injury for necessary medical…services”.

[7]                Section 88(2) of the Regulation allows the Corporation to pay for other benefits that, in the opinion of their medical advisor, are likely to promote the rehabilitation of the insured.  It does not specifically refer to payment for medication.

[8]                Section 96 of the Regulation provides:

The corporation is not liable to pay benefits under this Part in respect of the injury or death of a person

(f)         whose injury or death is caused, directly or indirectly, by sickness or disease, unless the sickness or disease was contracted as a direct result of an accident for which benefits are provided under this Part.

Legal Principles

[9]                The parties agree that the following principles arise from decisions concerning a s. 25 deduction:

1.         When considering a s. 25 deduction, the central question is whether the plaintiff is a person who is or would have been entitled to Part 7 benefits.  If the answer to that question is affirmative, the court must estimate the value of further payments that the Corporation is authorized or required to make under the Regulation, and deduct that amount from the judgment: Sovani v. Jin, 2005 BCSC 1285, 47 B.C.L.R. (4th) 97.

2.         Issues between the plaintiff and ICBC over delivery of Part 7 benefits are not relevant considerations in determining a s. 25 deduction: Sovani.

3.         The court has no discretion to reduce an estimate of future s. 88(1) benefits for the purposes of a s. 25 deduction: Ayles (Guardian of) v. Talastasin, 2000 BCCA 87, 73 B.C.L.R. (3d) 60.

4.         Medication is an expense that falls under the mandatory or non-discretionary provision of s.88(1) of the Regulation: Ayles.

5.         Section 88(1) requires the Corporation to pay benefits for all reasonable expenses incurred by the insured as a result of the injury.

6.         The plaintiff may have had a pre-accident underlying “disease” entitling the Corporation to invoke an exemption from liability contained in s. 96(f) of the Regulation: Mawji v. Insurance Corporation of British Columbia, 2001 BCSC 1610.

7.         Trial judges must be cautious in estimating s. 25 deductions and any uncertainty as to entitlement must be resolved in favour of the plaintiff: Schmitt v. Thomson, 18 B.C.L.R. (3d) 153, 132 D.L.R. (4th) 310 (C.A.); Lynne v. Pearson, 55 B.C.L.R. (3d) 401, 111 B.C.A.C. 139.

Position of the Parties

The Defendants’ Position

[10]            The defendant Corporation states:

In this case, the plaintiff is a person who is or would have been entitled to Part 7 benefits.  The court has assessed the amount of future medication expense which falls within coverage of s. 88(1) of Part 7 of the Regulation, at $10,000.  As a result, the full amount of that assessment must be deducted from the judgment pursuant to s. 25 of the Insurance (Motor Vehicle) Act.  The court has no discretion to reduce the amount of the deduction.

[11]            The statement is predicated upon references to cases such as Ayles, where the court stated at ¶32:

As a claim covered by s. 88(1) I.C.B.C. is obliged to pay the benefits.  It is not a matter of discretion under s. 88(2) where entitlement depends ‘on the opinion of the corporation’s medical advisor’.

The Plaintiff’s Position

[12]            The plaintiff asserts that s. 88(1) of the Regulation requires the Corporation to pay all reasonable expenses (including medication) that the insured incurs, “as a result of the injury”.  While the defendants are liable in tort for pre-existing conditions or diseases that are triggered by the collision, the Corporation is not liable under Part 7 to pay benefits for such conditions: Mawji.

[13]            The plaintiff relies on the evidence at trial, which demonstrated that the plaintiff had certain pre-existing conditions triggered by the accident.  If the expenses are deducted from the tort claim pursuant to s. 25(5) and the plaintiff is required, each time she incurs a medication expense, to provide evidence to the Corporation that the expense was “incurred by the insured as a result of the injury”, this will create a hardship and may result in the plaintiff not obtaining the benefit under s. 88(1).

[14]            The plaintiff says she suffered diseases or sicknesses before the collision, including back pain for which she used muscle relaxants, demonstrating a pre-existing degenerative arthritis in her back; depression for which she was hospitalized and used medications; headaches for which she used medication and was seen by a neurologist; anxiety and stress arising from her family; and neck pain for which she used medication.  As time proceeds, the plaintiff argues, it will become progressively more difficult for the plaintiff to relate her medication treatment expenses to the collision that occurred in 2003.

[15]            Ultimately, the plaintiff argues that the defendants’ characterization of s. 88(1) as a “mandatory provision” overlooks the reality of Part 7 claims.  The plaintiff argues that the section does not say payment of benefits is mandatory.  The Corporation can, and perhaps will, resist such claims on an evidentiary basis.  As a result, the plaintiff submits there is little to no risk of any double recovery should the court assess a nominal sum for future entitlement to Part 7 benefits.


[16]            The defendant says that the plaintiff is entitled to Part 7 benefits and that the Corporation has no discretion under s. 88(1), as it does under s. 88(2), to deny the benefits.  In that regard, the defendant quotes from Ayles.  The reference to ¶32 of Ayles continues:

But here the class of future expense is obligatory, not discretionary, and so the plaintiff does not stand to lose anything by the deduction. It is only in circumstances where the classification of the future cost is unclear or an issue arises whether the item is covered by Part 7 at all, that some caution is required.

[17]            The court continues at ¶33:

The possibility that there may be some disagreement in the administration of the individual claims as they are presented in the future is simply part of an ongoing entitlement. The deduction must be made on the basis of entitlement not on the possibility that claims may be unfairly adjusted in the future.

[18]            In Mawji, the court concluded that because the plaintiff’s continuing injurious condition was caused in part and indirectly by her pre-existing underlining disease, the defendant was entitled to invoke the exemption from liability contained in Regulation 96(f).  The plaintiff was precluded from claiming Part 7 benefits and thus was to rely on the tortfeasor to provide the benefit.  The court found that the benefits claimed by the plaintiff related to consequences going beyond the injury directly caused by the accident.  The court concluded that in the context of Part 7, “injury” refers to the “continuing injurious condition of the claimant…one that is caused indirectly by her underlying disease” (at ¶13).

[19]            Many of the decisions referred to find that the payments under s. 88(1) are obligatory despite a pre-existing condition.  However, in Kibsey v. Wielki, 2008 BCSC 880 at ¶15, following Mawji, the court held that the plaintiff’s “current and ongoing disability” was caused “in part and indirectly, even to some extent directly,” by his pre-existing condition.  The court concluded “the chance of his obtaining Part 7 benefits to cover any of the future care costs is very unlikely.”  Accordingly, the court made no deduction from the jury’s award for the cost of future care.

[20]             Even though the payment under s. 88(1) is mandatory, the court in Kibsey recognizes that s. 88(1) requires that the expenses to be reimbursed must be incurred by the insured “as a result of the injury”.  Section 88 does not necessarily address those injuries that exacerbated a pre-existing condition.

[21]            Whereas the Corporation states the plaintiff’s future medication costs will be covered under s. 88(1) of the Regulation, I am live to the “caution” referred to in the Ayles decision where there is an issue about whether the item is covered by Part 7 at all.

[22]            In this case, I am persuaded that there is an issue about whether the plaintiff’s medication is covered by Part 7 at all, given that it not only provides benefits incurred by the insured as a result of the injury but also from conditions exacerbated by the accident.

[23]            I find that the amount awarded for the cost of future care, particularly medication, is not to be deducted from the judgment.

The Honourable Madam Justice Gropper